Most analysts had ruled out the ‘4-Year Cycle’ for Bitcoin [BTC], saying the narrative was dead. Among them is James Lavish, a partner at the Bitcoin Opportunity Fund.
James Lavish on Bitcoin’s ‘4-Year Cycle’
James Lavish claimed last year that a liquidity cycle drove the price, rendering Bitcoin halving cycles irrelevant. He admitted he was mistaken when BTC went on to hit a new high of $126K. Lavish said,
I thought the four-year cycle was dead. I declared it dead last year. I was wrong
Bitcoin started to turn in the 4-year cycle when prices got up over $100K, solidifying the narrative last year. Several Bitcoin OGs sitting on tens of thousands of BTC coins started selling relentlessly, monetizing all the wealth they accumulated over the years.
From those actions, Lavish said Bitcoin was the only rational exit as the US debt spiraled to new heights, tipping BTC to make a new high in 2026.
Why liquidity always wins
When money supply increases, the prices of everything go up, including gold, silver, Bitcoin, stocks, bonds, and real estate.
Conversely, Lavish noted that fears about wars, quantum computing, and AI may take the markets down in the short term.
Lavish said this period resembled March and April 2020, into 2021 and 2022, when the market rebounded after quantitative easing. Hence, liquidity always wins.
That could repeat as the Fed pumps billions into the money supply through the buying of long-term treasury bills from banks.
On that note, Lavish noted that the Fed had no other choice but to print more dollars to manage debt that had doubled in 10 years to around $39 trillion. The US needs to service $12 trillion in debts this year.
Hence, they needed to ensure more US dollars hit the system. The authorities intentionally kept the dollar weak to facilitate financing.
As for this, Lavish said,
The $39T US debt isn’t a problem to solve. It’s a system to maintain. More refinancing. More liquidity. A weaker dollar by design.
Can BTC make a new high?
Lavish noted that this Bitcoin cycle was a bit different from the rest, where corrections run between 70% and 90%. For this one, the correction was about 50%, to around $65K from a high of $126K.
The charts showed that price action has been hitting higher levels since the potential bottom began to form in February.
There is an anticipation that the price will trade to $84K before another significant correction. Breaching this level would put $96K in sight.
Kyle Chase noted that a correction back to $65K cannot be ruled out. The analyst noted that if BTC did fall to that range, traders would add more leverage ahead of BTC making a new high.
Final Summary
- James Lavish admits that the ‘four-year cycle’ for Bitcoin is still alive.
- Lavish anticipated that Bitcoin would form a new high this year as the Fed pumps liquidity.